Printer Friendly Format Email a Friend

PR- 173-07
June 5, 2007


Reforms to be Introduced Today Also Close Corporate Contribution Loopholes, Broaden Definition of Bundlers, and Adjust Matching Funds Formula While Reining in Public Funds In Noncompetitive Elections

Mayor Michael Bloomberg, Council Speaker Christine C. Quinn, and Council Governmental Operations Chair Simcha Felder announced an agreement today on the toughest campaign finance limitations in the nation, with sweeping restrictions on "pay to play" - the practice of giving large campaign contributions in order to inappropriately influence government.  The proposals, which will be introduced at today's Stated Council Meeting, would also close corporate contribution loopholes, broaden the definition of bundlers, rein in matching funds in non-competitive elections, create the City's most progressive effort yet to encourage more candidates to solicit smaller contributions by implementing a 6-to-1 public matching fund ratio for contributions under $175, explicitly prohibit the use of campaign funds for personal use, and make other administrative changes to improve the campaign finance system.  The Mayor, Speaker Quinn, and Chairman Felder were joined today by Campaign Finance Board Chairman Frederick A.O. Schwarz and representatives of the Citizens Union, the New York Public Interest Group, and Common Cause/NY for an announcement in City Hall's Blue Room.

"Most people don't give any money to candidates, and those that do usually give small donations.  So when they hear about lobbyists, developers, and others who are making big campaign contributions at the same time as they are trying to win big contracts, or gain approval for a development project, or win economic development incentives, they inevitably grow cynical.  And who can blame them?" said Mayor Bloomberg.  "By setting up the nation's toughest campaign finance limits, we're ensuring that campaign contributions don't lead to special favors from government so every New Yorker knows that their government truly works for them, not the special interests."

"Today we are taking a giant step forward to protect our City's democratic process," said Speaker Christine C. Quinn.  "With the introduction of today's wide-ranging, historic legislation, we are creating a national platinum standard for Campaign Finance reform.  By limiting the influence of big business, closing loopholes that allow business entities to contribute despite bans, and placing more emphasis on incentivizing smaller contributions, we are ending

perceptions of undue influence and giving every day New Yorkers a greater voice in the political process.  For their conviction about the critical need to advance this legislation, I'd like to acknowledge Mayor Michael Bloomberg, City Council Governmental Operations Chairman Simcha Felder, my colleagues in the Council, and our partners in the Campaign Finance Board and good government groups.  This collaboration enables us to make an essential investment in our democracy."

"The Mayor and the Speaker has shown tremendous leadership in putting together reform legislation that makes sense," said Governmental Operations Chair Simcha Felder.  "This law will bring further transparency to the campaign finance program without erecting ominous barriers to entry to citizens who want to run for office.  The Mayor, the Speaker and their staffs should be applauded for their work."

"A strict limit on contributions from contractors, lobbyists, developers, and other individuals who do business with City government will absolutely improve New York City's landmark Campaign Finance Program.  I'm confident that with continued cooperation between the Campaign Finance Board, City Hall and the responsible agencies, this important reform will succeed," said Campaign Finance Board Chairman Frederick A.O. Schwarz.  "Importantly, the legislation will make it possible for the Board to protect the public's investment in the political  process with the same diligence New York City taxpayers have come to expect since the Program was created almost twenty years ago."

"Today's proposed reforms of the city's campaign finance program is an achievement of historic proportions, and rivals, if not exceeds, previous reforms like the 4:1 match or the banning of corporate contributions," said Citizens Union Executive Director Dick Dadey.  "The Mayor, Speaker and Campaign Finance Board are to be congratulated. They have successfully resolved issues that protect the right of people to participate in campaigns, strengthen the value of small donors while limiting the influence of many big money interests who do business with the system."

"This legislation ensures that New York City will have the best local campaign finance program in the U.S.  Our city continues to lead the nation in curbing the influence of special interests - and is way ahead of its own state government," said Gene Russianoff, Senior Attorney for New York Public Interest Research Group

"Today, New York City is taking yet another big step forward in reducing the potential for special interest influence at City Hall," said Megan Quattlebaum, Associate Director of Common Cause/NY.  "By passing important new provisions aimed at curbing so-called 'pay-to-play' practices, ensuring that campaign funds may not be converted to personal uses, and requiring better disclosure of 'bundled' contributions, among other things, the city is proving itself to be a responsible and forward-thinking steward of its landmark campaign finance program and leaving Albany in the dust.  Now it's time for the lawmakers in our state Capitol to wake up and start playing catch up by passing their own campaign finance reform legislation this year."

Cracking Down on Pay-To-Play

In what is by far the most comprehensive limitation on special interest campaign contributions in the country, today's legislation severely limits donations from those who do business with New York City, including individuals and entities with City contracts, concessions, and franchises, or grants valued at or greater than $100,000; land use ruling applicants, and parties to discretionary economic development agreements.  These limitations would also apply to transition and inaugural entities.

The contribution caps on these individuals would be $250 for Council races, $320 for borough-wide races and $400 for city-wide races, a 90% reduction in the current allowances for such individuals.  In addition, these contributions would no longer be eligible for any matching funds.  (Currently, the first $250 given by a New York City resident triggers an additional $1,000 in public matching funds.) 

To track which individuals and entities fall into this restricted category, the City's Department of Information Technology and Telecommunications would develop databases that the Campaign Finance Board will be required to use to determine who is doing business with the City.  

Closing Business Contribution Loopholes

The proposed bill would also widen the existing ban on corporate contributions to include Limited Liability Companies (LLCs), Limited Liability Partnerships (LLPs) and other forms of non-incorporated businesses.

Improving Disclosure of 'Bundlers'

Today's legislation broadens the definition of a fundraising intermediary, or "bundler," to include anyone who solicits a contribution for a campaign.  Under the current system, only those outside a campaign who receive and deliver contributions on behalf of the campaign are considered intermediaries.  This reform requires that those who solicit contributions are also listed as bundlers, which will ensure that campaigns disclose those who act as bundlers regardless of whether such agents personally deliver the checks.

Increasing Matching Funds

This reform proposal also attempts to put the full weight of the public financing system behind smaller, grassroots contributions.  To this effect, the bill adjusts the matching fund rate from 4-to-1 for the first $250 received from a contributor to 6-to-1 for the first $175 received - roughly the same total amount a candidate can now receive under the current matching formula.  The measure will not only demand that candidates pay more attention to average New Yorkers but will also give more people a greater voice in the process of electing our local representatives. 

Eliminating Matching Funds for Noncompetitive Elections

Under the current campaign finance system, the payment of matching funds for noncompetitive elections is often cited as an example of wasteful spending.  Currently, in instances where their opponent has spent less than 20% of the expenditure limit, a candidate only has to submit a statement of need with no other documentation to receive full public financing. The new proposal establishes clear criteria that must be met in order for a race to be deemed competitive. Those would include receiving significant endorsements, or having name recognition documented from previous races or significant media exposure. A candidate would need to prove that his or her opponent meets one of these criteria to qualify the race as competitive and to merit the release of public matching funds.  The proposal also eliminates the automatic trigger for public funds that results when a candidate's opponent receives public funds.

Updating Campaign Spending Limits and Closing Loopholes

Today's legislation limits the ability of campaigns to claim general compliance or petitioning costs as exempt from their spending limits, which the law currently allows. Since general compliance or petitioning costs are such large gray areas, there has been a lack of clarity for candidates as to what falls into this category, and it has allowed some campaigns to spend excessively outside their limits by claiming the spending was related to compliance or petitioning. To insure these expenses are covered under the campaign's overall spending limits, the cap would be increased by 7.5 percent, which is the current "safe harbor" allowed by the Board for exempt expenditures.
Expediting Campaign Audits

Every campaign for City office is subject to a mandatory audit by the Campaign Finance Board, even if candidates don't accept contributions or matching funds.  Occasionally, these campaign audits are still underway when a candidate approaches the next election.  Today's proposed legislation includes completion dates of eight months for draft audits and 16 months for final audits for Council and Boro-wide campaigns, and ten months and 18 months for City-wide campaigns.  However, as an added incentive, time limits for final audits can be reduced by two months if the campaign takes part in the Campaign Finance Board's audit training sessions.  Campaign Finance Board data shows that candidates who go through the classes have much less trouble navigating the system and experience fewer less complicated audits.. 

Administrative Changes

Today's reforms would also set up a clear separation between those who investigate (CFB staff) and those who adjudicate (Board) and establish due process for Board hearings.

Appointment of Father Joseph P. Parkes to the Campaign Finance Board

Mayor Bloomberg today also appointed Father Joseph P. Parkes, S.J. to the New York City Campaign Finance Board. Father Parkes replaces Rabbi Joseph Potasnik, who completed his term on March 31, 2007.

Father Parkes is currently the president of Cristo Rey New York High School in East Harlem.  He also sits on the Boards of St. Aloysius School in Central Harlem, Incarnation School in Washington Heights, and St. Ignatius School in Hunts Point.  He previously served as President of the Fordham Preparatory School.  He earned his Bachelor's degree from the
Fordham University College of Philosophy & Letters, his M.A. in Medieval History from the University of Wisconsin and his Masters of Divinity from Woodstock College.  

In addition to his educational work, Father Parkes has served as Business Manager and Associate Editor of America Magazine. He also served in a variety of posts within the New York Province of the Society of Jesus before his appointment as Provincial.  His term on the Campaign Finance Board expires in 2012. 

As mandated by the New York City Campaign Finance Act and the City Charter, the CFB is composed of five board members: two are appointed by the mayor, two by the speaker of the City Council, and one, the chairman, by the mayor after consultation with the speaker. The Board is strictly nonpartisan, and by law the Mayor's and the Speaker's two appointees must come from different political parties. Board members serve staggered, five year terms.


Stu Loeser (Mayor)   (212) 788-2958

Sandra Mullin (Council)   (212) 788-7124

Eric Friedman (Campaign Finance Board)   (212) 306-7116

More Resources
Watch the video in 56k or 300k